Home
| Databases
| WorldLII
| Search
| Feedback
Court of Appeal of Fiji |
IN THE COURT OF APPEAL, FIJI ISLANDS
APPELLATE JURISDICTION
CIVIL APPEAL NO.ABU 0002 OF 2009
[High Court Civil Action No.HBC 132 of 2001]
BETWEEN:
ROBERT McEWEN KASAVU RIGAMOTO
and MARIETA MAKARITA RIGAMOTO
Appellants
AND:
NBF ASSET MANAGEMENT BANK
Respondent
CORAM: Hon. Justice William Marshall, Justice of Appeal
Hon. Justice Kankani Chitrasiri, Justice of Appeal
Hon. Justice Sriskandarajah Sundaram, Justice of Appeal
COUNSEL: Mr D.Sharma for the Appellants
Mr K.Singh for the Respondent
Date of Hearing: Wednesday, 31 August 2011
Date of Judgment: Wednesday, 14 September 2011
JUDGMENT
William Marshall, JA
"that the two farm hands did not know the contents of the documents that they were signing, as they had abstained from enquiry about the documents as they did not and do not want to know the truth concerning them."
Kankani T. Chitrasiri, JA
Sriskandarajah, JA
The Judgment on Appeal
The Grounds of Appeal
"1. That the Learned Judge erred in fact and in law in not giving any consideration to the issue whether the Plaintiff had contributed to their alleged losses and thus failed to apportion and/or reduce any award of damages based on the actions of the Respondent, Visanti Makrava and their Solicitors GP Lala & Associates.
Consideration of Submissions and Grounds of Appeal
Grounds 1 and 2
Grounds 3 and 6
Grounds 4 and 5
18. The Appellants in grounds 4 and 5 allege that the Learned Judge erred in fact and in law by not giving sufficient weight to certain documents including the 1st Appellant's letter dated 10th May 1995. The Learned Judge in his judgement has given sufficient consideration to the said letter dated 10th May 1995 and observed that this letter is a clear indicator that the Rigamotos were caught in a losing venture and had decided to get out of it and they were seeking assistance from the 3rd Defendant of how to "go about release/takeover". The Learned Judge arrived at a finding that they knew Visanti Makrava (3rd Defendant) well and he was prepared to assist the first two Defendants.
19. The documents referred to in Ground 5 are as follows: a letter of Rigamotos addressed to the Chief Manager informing him that the sale of the farm was finalised and the purchase price includes all debts, the loan application of Ranjit Prased and Rajesh Chand, and the bank letters to other banks to check the credit worthiness and reply and the undertaking given by two farm hands. The loan application and the connected documents are irrelevant as the application was made very much after the transaction was completed but in any event the loan was not granted at any time. Out of the documents referred to in ground 5 the only relevant document is the undertaking given by two farm hands, the Learned Judge has given adequate consideration to this document and observed that the Rigamotos would also have known that the prospective purchasers did not have the means to either pay them or to pay the Bank. They would have known that the undertaking given by the two was useless as later events of no payments showed. In the above circumstances the Grounds urged in 4 and 5 are not substantiated and in my view the Appeal fails in these grounds.
Grounds 7, 8 and 9
20. The Appellants' main challenge to the Judgement contained in Grounds 7, 8 and 9. The Appellants contended that the Learned Judge erred in finding that the 4th and 5th Defendants were misinformed about what they were signing and finding that the Appellants are liable to their personal obligations despite of the fact that the Appellant's' Mortgage was discharged by the Respondent.
21. It is an admitted fact that the property is currently registered under the 4th and 5th Defendants (the farm hands) as proprietors. The law relating to the registration of land is that; a land is registered with the registrar of titles, is conclusive proof of ownership of land in Fiji. This confers indefeasibility of title. The only exception provided Under Section 62 of the Land Transfer Act is the proof of fraud and if successfully pleaded can result in an amendment of the register, Subaramani & Another v. Dharma Sheela [1982] 28Fiji LR 82.
22. Fraud is defined in terms of the Land Transfer Act in New Zealand which is in pari materia with Fiji statutory framework by the Privy Council in the case of Assets Company limited v. Mere Roihi [1905] UKLawRpAC 11; [1905] AC 176. The facts were that the Asset Company had many years previously bought parcels of native land at fair market value and had the transfers registered according to the usages of the land administration statutory framework in place at the time of purchase. The Privy Council held that the New Zealand Court of Appeal had erred in finding that matters well short of fraud entitled the native vendors to have the registrations lifted.
23. Said Lord Lindley for the Board at pages 210, 211 and 212:
"Passing now to the question of fraud, their Lordship are unable to agree with the Court of Appeal. Sects. 46, 119, 129 and 130 of the Land Transfer Act, 1870, and the corresponding sections of the Act of 1885 (namely, ss. 55, 56, 189 and 190) appear to their Lordships to shew that by fraud in these Acts is meant actual fraud, i.e., dishonesty of some sort, not what is called constructive or equitable fraud – an unfortunate expression and one very apt to mislead, but often used, for want of a better term, to denote transactions having consequences in equity similar to those which flow from fraud. Further, it appears to their Lordships that the fraud which must be proved in order to invalidate the title of a registered purchaser from a person claiming under a title certified under the Native Land Acts, must be brought home to the person whose registered title is impeached or to his agents. The mere fact that he might have found out fraud if he had been more vigilant, and had made further inquiries which he omitted to make, does not of itself prove fraud on his part. But if it be shown that his suspicions were aroused, and that he abstained from making inquiries for fear of learning the truth, the case is very different, and fraud may be properly ascribed to him. A person who presents for registration a document which is forged or has been fraudulently or improperly obtained is not guilty of fraud if he honestly believes it to be a genuine document which can be properly acted upon.
In dealing with Colonial titles depending on the system of registration which they have adopted, it is most important that the foregoing principles should be borne in mind, for if they are lost sight of that system will be rendered unworkable. Their Lordships are keenly alive to the necessity of vigilance to protect natives against unfair and oppressive dealings on the part of Europeans; but on the other hand it is equally important not to disturb registered titles of bona fide purchasers, especially when accompanied by long possession and large outlays ... ...
... ... Their Lordships cannot help thinking that the equitable doctrines of constructive fraud have weighed too much with the Court of Appeal and have induced it to impute fraud to the Assets Company, although no dishonesty by the company or its agents, or by the liquidators of the City of Glasgow Bank, was really established. Nor is there any proof whatever that the liquidators of the City of Glasgow Bank, was really established. Nor is there any proof whatever that the liquidators or the Assets Company dishonestly refrained from making inquiries which an honest purchaser would have made."
24. What is shown by the passage is that the fraud which must be proved to invalidate the title of a registered purchaser for value, must be brought home to the person whose registered title is impeached or to his agents or if it is shown that his suspicions were aroused, and he abstain from making inquiries for fear of learning the truth, fraud may be properly ascribed to him.
25. The Learned Judge analysed the evidence and had come to the finding that the transfer of certificate of Title 17821 from the Rigamotos to the two farm hands and the discharge of mortgage of the Appellants were done fraudulently. He has given his reasons for his finding. Learned Judge observed that the 1st and 2nd Defendants (Rigamotos) found themselves in a dilemma. They were lumbered with a farm which was not generating enough income. There was a mortgage which needed to be paid off. The Rigamotos were unable to find a buyer and they were desperate. Hence they fraudulently transferred the farm without any consideration to the two farm hands with the assistance of Visanti Makrava the Chief Manager of National Bank of Fiji. The two farm hands were not clients of the Bank so they were not from the pool of Bank's customers looking for properties to buy. The only persons who were going to gain from this were the Rigamotos as it would enable them to extricate themselves from a difficult situation.
26. The Learned Judge also arrived at a finding that Rigamotos knew Visanti Makrava well and he was prepared to assist the Rigamotos and he acted fraudulently and secretively without approvals and written instructions contrary to the normal Bank practice. The Rigamotos have by this device managed to get out of their huge debt to the Bank and which to this day remains unpaid as the two farm hands have not paid a cent of their debt. The Appellants' knew exactly what they were doing, and they were working in concert with Visanti Makrava in order to defraud the Respondent Bank.
27. But the above findings that the Appellants acted fraudulently in executing the transfer of the farm land to the farm hands in concert with Visanti Makrava alone is not sufficient to impeach the registered title of the farm hands, unless proof is provided that the farm hands have acted fraudulently or that their suspicions were aroused, and they abstain from making inquiries for fear of learning the truth.
28. There are findings in the Learned Trial Judge's Judgement in relation to the farm hands; that they have signed a mortgage; they signed a bank guarantee, an under taking and a transfer document. It is in evidence that the farm hands had made a commercial loan application to the Bank. In this loan application it has been stated that the amount sought is $420,000; Request is for 100% finance. Under the column background it has been stated that the applicants have no existing accounts with NBF and no collateral advance anticipated. They were employed as full time dairy farmers by the vendor.
29. The Learned Trial Judge analysed the law on defence of non est factum and held that it is not lightly allowed when a person of full age and capacity has signed a written document embodying contractual terms: Fiji Development Bank v. Ragona [1977] FamCA 81; (1985) 30 FLR 151. The general rule is that a party of full age and understanding is bound by his/her signature to a document whether he/she reads or understands it or not: Hewitt v. Habib Bank Ltd ABU 7 of 2004.
30. The learned Judge when arriving at a finding based on the demeanour of one of the farm hands Rajesh Chand said "Rajesh Chand struck me as a simple rustic person but not foolish".
31. The Learned Judge observed in paragraph18 of his judgment that one of the farm hands was earning $7.00 a day. He concluded: "It is very unlikely that these two farm hands impecunious as they were would embark on a venture this big? Rajesh Chand stated all he knew was to milk cows". At paragraph 22, Justice Jiten Singh said:
"The two farm hands were not clients of the Bank so they were not from the pool of Bank's customers looking for properties to buy. Rajesh Chand struck me as a simple rustic person but not foolish. He would have known that with his income it would be foolhardy to venture into an enterprise this big. I am of the view having heard him testify in a convincing coherent way that he was not interested at all in buying the property and the only reason he signed various documents was because he believed that it would enable him to run the farm".
32. It is the finding of the Learned Judge that the farm hands were not interested at all in buying the property. The evidence reveals that the farm hands had gone to the Bank on several occasions to meet Visanti Makrava and signed documents in the Bank including a loan application. They went to Lawyers G.P.Lala's office to sign transfer and mortgage documents. In this background can one attribute innocence to the farm hand and draw an inference that the two farm hands did not know that they were signing a transfer of land but something else?
33. The facts reveal that the farm hands are working in the farm for the Appellants and looking after the dairy cows and the milking business. There is no need for them to sign additional documents to manage the farm. When requests were made to sign several documents on different dates including the documents in lawyer's office a person like Rajesh Chand who struck the Learned Judge as not a fool would have definitely entertained a suspicion. At least they would have interested to know the liabilities in signing these documents.
34. It is obvious that for the farm hands to continue in employment that they have only one option that is to agree to the arrangements made by the Appellants and Makrava to protect the farm from changing hand to a third party by a mortgage sale. Rajesh Chand in his evidence said that the only reason he signed various documents was because he believed that it would enable them to run the farm. The farm hands had several occasions to clarify matters regarding this transaction and in particular about their rights and liabilities. They have signed transfer documents, mortgage documents, loan application, guarantee and an undertaking. They have visited and met Bank managers, Bank officials and Lawyers to sign documents but they have not made any inquiry regarding this transaction and of their rights and liabilities. From the facts and circumstances of this case it can be safely inferred that the farm hands abstained from making inquiries for fear of learning the truth.
35. From the oral and documentary evidence the Learned Judge had made number of findings based on these findings he has drawn some inference one such inference [paragraph 29] was that two farm hands did not know that they were signing a transfer of land but something else. In the given facts and circumstances this inference is erroneous. In an appeal it is inappropriate for an Appeal Court to disturb a finding of the Trial Judge as he had the privilege of hearing the evidence, Pati v. Singh [2003] FJCA 51. In this case I am not disturbing the finding of the Learned Judge that he derived from evidence but he has drawn a wrong inference from the said findings. In appeal proceedings a wrong decision could be substituted by a right decision provided that there is sufficient material to arrive at the said right decision. See section 13 of the Court of Appeal Act.
36. For the above reasons I am of the opinion that this court should set aside the conclusion of the Learned Judge at paragraph 29 of the judgment "that the two farm hands did not know that they were signing a transfer of land but something else" and substitute the decision "that the two farm hands did not know the contents of the documents that they were signing, as they abstained from inquiring about the documents as they did not want to know the truth concerning them". The two farm hands were acting in connivance with the Appellants and Visanti Makrava for the purpose of continuing their employment. If they wished they would have clarified the said documents as they got several opportunities to clarify the same.
37. The setting aside of the said wrong decision and substituting with a correct decision strengthens the final order of the Trial Judge. In my view the appeal on Ground 7 should be dismissed.
38. It has been established that the suspicions of the two farm hands were aroused, and they abstain from making inquires for the fear of learning the truth, hence fraud could be properly ascribed to them, Assets Company limited v. Mere Roihi [1905] UKLawRpAC 11; [1905] AC 176 at p, 210 (supra). As fraud vitiates the transfer of title from the Appellants to the farm hands the transfer No 379097 registered on 13th June 1995 becomes void and any mortgage given by the farm hands based on this transaction is also void. In these circumstances the title of the farm property remains with the Appellants. The discharge of the Appellants mortgage number 312891 against the Certificate of Title 17821 is invalid as it is based on the aforesaid invalid fraudulent transaction.
39. Hence the appeal should fail on these grounds as well.
40. In my opinion this court should dismiss this appeal and order the Appellants to pay the Respondent $2,000.00 in respect of costs.
William Marshall, JA
ORDERS OF THE COURT
41. The Court orders
(1) That the appeals of Robert McEwen Kasavu Rigamoto and of Mrs Marieta Makarita Rigamoto be dismissed.
(2) The orders of Justice Jiten Singh in the Court below be confirmed.
(3) The costs of appeal of the Respondents, the National Bank of Fiji Asset Management Bank be paid by the Appellants assessed in the sum of $2000.
..............................................................
Hon. Justice William Marshall
Justice of Appeal
..............................................................
Hon. Justice Kankani Chitrasiri
Justice of Appeal
..............................................................
Hon. Justice Sriskandarajah Sundaram
Justice of Appeal
SOLICITORS
R Patel Lawyers for the Appellants
Jamnadas & Associates for the Respondent
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJCA/2011/42.html